2022 has seen a marked shift from “growth” to “value.” This has seen a resurgence in both bank and oil stocks. The former is expected to see an improvement in profitability, as interest rates rise with tighter monetary policy, whilst the latter are expected to benefit from higher oil prices ― more recently accelerated by the situation in Ukraine.
With the latest US CPI reading over 5%, we have been receiving a number of questions from investors about what this means for the future composition of our portfolio. Well, the simple answer is not that much ― and here’s why.
As regular readers of our articles will know, we believe that accurate and consistent economic forecasts are exceptionally difficult, and it is even more difficult to successfully construct a portfolio to express such a view.
When thinking about COVID winners, a 70-year-old US-centric payroll solutions company is unlikely to be top of mind. However, complex requirements for stimulus applications through the pandemic ― combined with the ability to develop solutions to service these changes ― has entrenched NASDAQ-listed ADP with its client base more than ever.
We see ADP as an attractive quality compounder with a 45-year track record of consecutive dividend increases and in this article cover some of the many reasons why ADP has made it into our 15-stock portfolio.
Management team changes can be typically disruptive for companies, often because it may further compound the already challenging position that led to the original need for change in the first place.
When one of the companies in our investment universe undergoes a change, we prefer to take a conservative approach and wait on the sidelines for compelling evidence that the new management team is truly a force for good.
Agilent Technologies is a life sciences company that provide a range of analytical instruments involved primarily in quality control and assurance of the lab. Its expertise largely sits in the highly specialised field of liquid/gas chromatography and mass spectrometry instruments. This underpins the company's comprehensive and growing services, consumables, and informatics piece.
As the pandemic accelerates the shift to online shopping, investors have favoured those retailers with superior e-commerce capabilities as the winners in a post-pandemic world. However, we can still continue to see long-term growth opportunities for some bricks and mortar retailers with differentiated and proven business models. And for us, Ross Stores is a clear example.
